How to rejuvenate agriculture in India

How to rejuvenate agriculture in India
Dr P K Mishra

Agriculture in India is at crossroads today: on one hand, there has been deceleration of growth in recent years, and on the other hand, many new opportunities and possibilities are emerging। Percentage of the population depending on agriculture has not declined significantly even though the share of agriculture in the country’s gross domestic product (GDP) has substantially gone down। The green revolution transformed the agriculture sector and there was tremendous growth till the 1980s and early 1990s। Then there was stagnation in agricultural growth for about a decade। However, there are signs of accelerated growth during the last two years। Furthermore, there are indications of structural changes with immense possibilities of a demand driven agriculture। The interest shown by corporate sector and the new focus on agriculture as a part of public policy and government efforts could bring about radical transformation in the agriculture sector। Yet, the predominance of small farms, rain fed agriculture on more than half of the arable land and lack of rural infrastructure are some of the aspects which need to be addressed in order to rejuvenate the agriculture sector and bring about faster, sustainable and inclusive growth। Agriculture, particularly traditional farming, is risky – riskier than other types of business because of the nature of the crop cycle। Various factors such as the time taken by the crops to mature, energy used for crop cultivation, resource availability and their production response, dependence on weather, proneness to natural calamities and markets are either too demanding or fraught with uncertainty। Owing to various factors, the growth rate in the agriculture sector decelerated during the last decade। The production of food grains stagnated, the issue of food security re-emerged. Farmers’ distress and cases of suicides were reported form some parts of the country. The accentuation of debt burden on farmers was attributed to the declining production efficiency, lack of access to institutional credit, high cost of inputs and unfavourable market conditions. Yield and price risks, and reduction in farm size have made agriculture less remunerative. The GDP from agriculture and allied sectors grew at a paltry 2.1 per cent during the Ninth Plan and 2.3 per cent during the Tenth Plan. Of course, the growth rate was much higher in the areas such as flower exports, organic food production, food processing and dairy, where new opportunities arose because of the rising urban demand and globalization. In India where nearly two thirds of the farmers primarily depend on rains for cultivation of crops, the consequences of inclement weather on crop production could affect even the livelihood of farmers, most of whom are small and marginal farmers. Frequent occurrences of drought and flood in several parts of the country cause crop losses leading to farmers’ distress. Besides these erratic natural factors, deficiencies in the delivery system and knowledge gap adversely impact farmers’ capability to realize the earth’s production potential. Consequently, farmers remain economically vulnerable and poor and the country faces problems of price rise and costly imports. In the past the focus of our policy and efforts has been on production and productivity. It is realized now that the focus has to shift to the farmer – his capability, economic viability and welfare. The recently announced National Policy on Farmers is a milestone in this endeavour. The agriculture sector has the largest number of private enterprises and probably the most privatized economic activity in terms of the number of economic agents. However, the role of governments – state and central – is crucial. Government policy direction and efforts are important for availability of inputs, credit and transfer of technology. They need to be proactive in taking steps to facilitate availability of fertilizers, pesticides, seeds and other inputs. It is also necessary to guide and educate farmers about new technologies, provide rural infrastructure and make available market information. National Policy for Farmers Government of India set up the National Commission on Farmers three years ago with Prof. M.S.Swaminathan, a renowned agricultural scientist, as chairman. Its recommendations have resulted in the first ever National Policy for Farmers. The policy focuses on the farmer and aims to improve the economic viability of farming. The policy inter alia aims at sustainability and conservation of resources, development of affordable support services, strengthening of bio-security, market safeguards and risk management, furthering reforms and enhancing competitiveness for holistic development of our agrarian economy. It is also suggested that the measurement of agricultural progress should be based on enhancement of farm income and non-farm rural employment for farm households. Government of India has initiated steps to see that the policy is implemented both in letter and spirit in a time-bound manner. In recent days, there has been greater focus on the agriculture sector. For the first time after Independence a special meeting of the National Development Council (NDC) was convened in May 2007 to discuss matters relating to agriculture. Several important decisions were taken by the NDC to revitalize the agriculture sector. It was also resolved by the government of India and also the state governments to have a target of 4 per cent annual growth in agriculture during the Eleventh Five Year Plan. Mega Schemes Following the NDC meeting, the government launched, within the shortest possible time, two mega schemes for which the central government would spend nearly Rs 30,000 crore during the 11th plan period (2007-12). The Rashtriya Krish Vikas Yojna (RKVY), a Rs. 25,000 crore scheme is to encourage state governments to start new programmes to support agriculture and to increase investment in the sector. The other major scheme is the National Food Security Mission. The central government will spend nearly Rs 5000 crore on this scheme during the period of five years. The scheme envisages production of additional 10 million tonnes of rice, 8 million tonnes of wheat and 2 million tonnes of pulses by the end of five years. The approach is to target districts with lower productivity at present but higher potentials. Efforts are being made to ensure availability of quality inputs, encourage better agricultural practices and close monitoring of a variety of activities. Kisan Credit Cards It is well known that making credit available to farmers is crucial for his farming activity. With Rs. 86,000 crore farm credit in 2004-05 as base, the government set a target of doubling it in three years. Four years later, in 2007-08 our accomplishment is much more than the original target, and agricultural loan disbursement during 2007-08 is likely to be Rs. 2, 25,000 crore. Starting 2006-07, interest on loans upto Rs 3,00,000 has been reduced to 7 percent, and banks have been advised to waive the requirement of margin/security for farm loan upto Rs 50,000. Kisan Credit Cards (KCC) are being promoted to simplify credit delivery and make the use of credit more flexible. So far, nearly 7 crore farmers have been provided with KCC’s. The growth rate of the agriculture sector has gone upto 4 percent during the last two years about 2 percent in the preceding years, owing to increase in food grain production and growth in the allied activities. Keeping in view the potential of activities such as horticulture and animal husbandry, two major initiatives have been taken: the National Horticulture Mission and the National Fisheries Development Board. Their promotional activities would not only generate additional income for farmers and diversify their activities, it would increase availability of produce for the food processing sector, generate employment and improve nutritional level of the food consumed. As a safety net for farmers the system of Minimum Support Price (MSP) is in existence for many years. During the last three years there has been unprecedented increase in the MSP for important crops such as cereals, pulses and oilseeds in order to ensure remunerative prices to farmers and protect their interests. Marketing infrastructure is important to reduce price risk. A number of initiatives have been taken. The objective of the ongoing process of reforms in agricultural marketing is to provide wider choice and greater options to farmers to sell their produce. The Government of India has circulated a Model Act and also a set of model rules to the states to facilitate the process of reform. A law has also been enacted to make storage/godown receipts negotiable so that farmers are able to get loans from banks based on the produce stored by them in warehouses. Taking Technology to Farmers A vast network of agricultural extension system has been one of the strengths of Indian agriculture. The system, evolved over the years, has played an important role in taking technology to farmers in the past. In recent times, however, the system has lost its efficacy in many areas. There is a concern about its inertia and inability to bridge the knowledge gap between lab and land. The Training and Visit (T&V) System, which was relevant in the past, may not be appropriate in the changed scenario. The system of Agriculture Technology Management Agency (ATMA), introduced a few years ago, is being extended to all the districts in the country. It provides a platform and flexibility to undertake extension activities through public, private, NGOs and other agencies. There is a need to further streamline ATMAs. A number of consultations with State Governments, experts and farmers’ organizations were held in recent months. Efforts are being made to encourage farmers’ field schools, public-private partnership and other mechanisms. It is also proposed to ensure that each state has a core group of extension workers which will play a catalytic role in facilitating extension services through various approaches, agencies and methods. In the wake of farmers’ suicides reported from some states, a Special Package with an estimated cost of Rs.17,000 crore is being implemented in 31 districts of Andhra Pradesh, Karnataka, Kerala and Maharashtra. It includes a variety of activities such as greater access to credit, use of quality seed, land and water conservation measures, horticulture and animal husbandry activities and so on. Based on the experience of the last two years, it is being proposed to re-orient the package, where necessary. It is also proposed to address the problem of farmers’ indebtedness comprehensively. Agricultural Insurance Managing agricultural risk is an important ingredient of our development process. The idea is to encourage farmers to adopt improved farming technology and agricultural practices which, though with potential of higher return, could be riskier. The National Agricultural Insurance Scheme is being implemented since the Rabi 2000 season. It is proposed to introduce certain modifications based on the past experience. During the current financial year, a Weather Based Crop Insurance Scheme (WBCIS) has been introduced on a pilot basis. It is proposed to be implemented in 12 States during the current Rabi season. In spite of substantial funding the coverage of agricultural insurance is still inadequate. In order to expand the coverage, the WBCIS envisages involvement of the private sector. In fact, two private companies have joined the Agriculture Insurance Company of India Ltd. for the implementation of WBCIS. There are other aspects such as rural infrastructure, natural resource management including land and water, expanding the use of micro-irrigation and the rural non-farm sector that are relevant to increasing farmers’ income and welfare. Development of the rural non-farm sector is particularly important so as to diversify the sources of livelihood and improve income. Needless to say, in spite of tremendous progress after Independence, both in agriculture and other sectors, much remains to be done in order to improve the condition of farmers. Concerns remain in several areas: deficient input supply mechanism, inadequate access to credit, lack of marketing infrastructure and exploitation by middlemen, rising pressure on land and water, inadequate insurance cover and the like. Dependence on the monsoon remains very high. Problems are many. In a vast like ours there is bound to be some problem somewhere. However, the renewed focus on agriculture in recent times and concerted efforts appear to have started yielding positive results. There are indications of revival in the agriculture sector. At this juncture it is necessary to identify our priorities with clarity and make all-out efforts to ensure effective action. There are ideas. Good technologies are available. What we need to do is to see that all these are put to practice and there is an effective delivery mechanism. As envisaged in the National Policy on Farmers, our focus should be to improve the income and welfare of farmers. This implies not only higher production and productivity, but also improving the capabilities of farmers to compete on the market place. It is necessary to ensure rural infrastructure, improved marketing facilities, effective system of delivery of input, credit and other services. There is a need to have a holistic approach incorporating rural infrastructure, dissemination of better technology, sustainable use of natural resources and development of the rural non-farm sector.



Dr P K Mishra is a Secretary of Agriculture and Cooperation